PROGRESS IN GEOGRAPHY ›› 2013, Vol. 32 ›› Issue (5): 777-787.doi: 10.11820/dlkxjz.2013.05.009

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Characteristics and mechanism of manufacturing industry shift in the Pearl River Delta during 1998-2009

LI Yan1, HE Canfei2,3   

  1. 1. Urban Planning and Design Institute, Shenzhen Graduate School of Peking University, Shenzhen 518055, China;
    2. College of Urban and Environmental Sciences, Peking University, Beijing 100871, China;
    3. Peking University-Lincoln Institute Center for Urban Development and Land Policy, Beijing 100871, China
  • Received:2012-09-01 Revised:2013-02-01 Online:2013-05-25 Published:2013-05-25

Abstract: As the forefront of China's reform and opening up, the Pearl River Delta (PRD) has become one of key research areas. Recently, the PRD experienced manufacturing relocation due to severe land and labor shortages as well as rising rents. Hence, issues of manufacturing industry shift in the PRD have increasingly become an important policy and academic focus. This paper intends to capture the characteristics of manufacturing industry shift from both industrial and regional perspectives, by using a micro firm-level census data. In general, industry agglomeration showed a U-shape tendency at two-digit industry level during 1998-2009. However, there were huge disparities in agglomeration level among different industries: resource-intensive industries have the highest level of agglomeration; the agglomeration level of technology and capital-intensive industries is lower than the average value of manufacturing industry in the PRD. At the regional scale, the disparity of regional specialization increased gradually along with the regional integration. The functional division of "Guangzhou-Foshan- Zhaoqing", "Zhuhai-Zhongshan-Jiangmen" and "Shenzhen-Dongguan-Huizhou" group is becoming clear. To explore the mechanism of manufacturing industry shift in the PRD, we applied Industry-Region interaction model to test the proposed hypothesis stated in comparative advantage theory and new economic geography theory. It was found that: (1) manufacturing industry in the PRD has shifted to regions with low transportation costs, low labor wages and land rents, or loose environmental regulations; (2) similar industrial structure in the PRD drives manufacturing shift; (3) industries with scale economies tend to move to regions with low transportation costs, and industries with close upstream and downstream linkage tend to move to regions with large market potential; (4) considering both industry and region heterogeneity, different industries have different shift direction, which means, besides comparative advantages, industry and region characteristics both significantly affect manufacturing industry shift. In the post-crisis era, deepening the understanding of manufacturing industry shift is beneficial to policy-making to drive the continued growth of the PRD economies.

Key words: agglomeration, manufacturing industry, regional specialization, spatial shift, the Pearl River Delta